Corporate governance risk management

Users Corporations that wish to demonstrate commitment to manage newly recognized corporate governance risks. 

Eurosif defines integration as the explicit inclusion by asset managers of [corporate governance]/[social, environmental, ethical] risk into traditional financial analysis . 

Other social controls indirectly influence industrial safety performance, such as laws and norms for corporate governance that cause companies to inform shareholders and potential investors about corporate activities so they can make informed decisions about financial risks. If the activities are hazardous, these sources of financial support may need to be convinced that their financial risks are held to acceptable levels by evidence of effective safety management, which thereby makes it necessary for companies to develop and implement codes of conduct and safety management practices that adhere to industrial standards and comply with government regulations. ... 

Kleflher, A.E., Lee, R.B. McGannon, B. 2003, The effect of corporate governance on the use of enterprise risk management evidence from Canada , Risk Management and Insurance Review Mount Vernon, vol. 6, no. 1, pp. 53-73. 

Five years of progressively responsible experience in developing corporate and/or government safety, risk management, and loss prevention programs. Two years must include responsibilities applicable to motor carrier safety — preferably in heavy-duty fleet transportation systems. 

Although risks posed by management have been shown to be significant contributors to accidents, they are not normally included in risk analyses or safety cases - with the result that assessments must be optimistic. If management issues were addressed, not only would there be truer representations of risk, there would also be a basis for the assessment and improvement of an organisation s corporate governance. 

Grouhy, Michel, Dan Galai, and Robert Mark. The Essentials of Risk Management. New York McGraw-HiU, 2006. The authors, corporate governance experts, provide a clear, well-written text about the field. 

Waring, A. (2000). Risk Management and Corporate Governance. The Safety and Health Practitioner, 18(10), 19-20. 

Although the term is used freely, Corporate Governance is not necessarily understood in terms of its definition, or its intent. Perhaps alarmingly, mai from the ranks ofboth directors and management are not fully aware of roles and responsibilities in terms of risk management within the context of corporate governance. 

A vital component of corporate governance is risk management, including both business and safety risk. Management control, including the development of an effective response to risk, is interwoven into these three elements of corporate governance (AICD, 2002). 

Based on its universal application, ERM opens up new possibilities to strive toward optimizing internal control systems, risk management systems and thus the entire corporate governance systems (Eichler and Bungartz 2004, pp. 108 and 112-113). Its importance is further exemplified by the Saibanes-Oxley Act of 2002 (SOX), where COSO s framework may become an important tool for implementing the directives set forth in the Sarbanes-Oxley Act of 2002 (Hermanson 2003, p. 3). 

Organizations using it can compare their risk management practices with an internationally recognised benchmark, providing sound principles for effective management and corporate governance. ... 

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